Africa Foreign Investor Survey 2005 - unido

mean and median of the output per employee for the six
investor type groups. The mean differences between
group components are significant for four of them: organizational
structure; North/South origin; main sectors
and start-up period. Large TNCs’ output per employee
is double that of S-TNCs which is about 75 per cent
higher than that of FEs. North investors average $90,000
sales per employee and South investors average $53,000.
Services sector achieves output per employee double that
of the manufacturers which is five-fold that of agro-business
(primary). Firms established before 1981 on average
achieved sales per employee last year of over
$115,000 compared to between $40,000 and $70,000
for the rest. Groups that exhibited slow sales growth rates
seem to have the highest sales per employee. Evidently,
different parameters were involved in driving high sales
revenue per employee compared to those that determined
whether a particular firm attained high sales
growth. High labour productivity may be associated with
stable, capital intensive, low growth market conditions
where the firms command considerable market share and
do not go after spectacular growth rates to compete.
Figure 5.20 and annex table 5.17 present the variations
in sales per employee at the subsectoral level. As
expected, trading companies and financial services firms
attained the highest average sales per employee. Exportoriented
and local resource-intensive businesses, garment
manufacturers, agro-industries, textiles and wood
products, achieved the lowest level of sales per employee.
These are by definition the high labor-intensive sectors
that move to locations in pursuit of the lowest labor cost.
Figure 5.21 and Annex Table 5.18 show the enormous
variation in sales per employee between countries. Fore
example, foreign investment in Côte d’Ivoire had very
different outcomes in terms of average sales per employee
from that in Madagascar reflecting the higher concentration
of North L-TNCs in the services sector in Côte
d’Ivoire and the higher concentration of garments and
textile exporters in Madagascar.
When sales per employee was computed according to
the country of origin of the investor, enormous dispersion
in values was obvious reflecting wide differences in the
types of firms originating from different countries.This is
presented through log-transformation in order to smooth
out the impact of outliers in relatively small-sized country
samples (table 5.4).The figures for each country gives
the percentage difference between the log transformed
country mean and the sample mean. It can be regarded
as a relative scale of highest to lowest labour productivity.
The log-transformed value of sales per employee by
company characteristics was used to identify the features
of companies with high sales per employee. Subsidiaries of
large TNCs had sales per employee of 120 per cent above
the average for all firms. Subsidiaries of small TNCs
achieved the same average sales as that for all firms in the
sample, while foreign entrepreneur-invested firms attained
sales per employee 35 per cent below the average.
When the 167 subsidiaries of services sector L-TNCs
were examined separately, the overall mean of sales per
employee increased to more than 180 per cent above the
Figure 5.20 Sales per employee by subsector
Figure 5.21 Sales per employee by host country
Garment, Apparel & Leather
6.1
6.9
Agric., Fish & Nat. Resources
4.3
9.8
Textile 4.2 14.6
Wood prods. & Furniture 10.5 19.7
Hotel & Restaurant 13.3 23.1
Mean
Median
Madagascar
Ethiopia
Guinea
Nigeria
7.9
10.6
16.0
20.1
19.4
22.0
22.9
51.7
Mean
Median
Publishing & Media
17.4
23.2
Uganda
28.7
52.4
Professional Services
18.5
32.5
Ghana
21.3
57.5
Paper & Paper prods.
29.4
37.0
Tanzania, UR
25.4
57.9
Construction
Chemical, Plastic & Rubber
Auto, Machinery & Equipm.
21.7 38.8
24.1 54.3
29.7 56.5
Burkina Faso
Mozambique
20.0
36.2
61.3
64.8
Food, Beverages & Tobacco
35.4
65.0
Senegal
53.8
83.0
Elec., Gas & Water supply
24.7
67.3
Malawi
28.0
91.2
Transport & Communication
Non-Metallic mineral prods.
Basic Metals
28.9
37.0
58.7
79.6
81.1
90.7
Mali
Kenya
44.2
50.4
94.6
131.0
Financial Intermediation
66.3
99.9
Cameroon
58.4
141.0
Marketing, Sales & Distribution
55.8
152.1
Côte d'Ivoire
76.2
144.8
0 20 40 60 80 100 120 140 160
Thousands USD
0 20 40 60 80 100 120 140 160
Thousands USD
66
Africa Foreign Investor Survey 2005